The weekly messenger | Edition 24.21

August 2021

This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas.

Regulatory news

Amendment in Companies (Appointment and Qualification of Directors) Rules, 2014- A Chartered Accountant in practice for at least 10 years is not required to clear online proficiency test to become Independent Director – 25 August 2021

The Ministry of Corporate Affairs (MCA) vide its notification dated 19 August 2021 had issued the Companies (Appointment and Qualification of Directors) Amendment Rules, 2021, wherein it had relaxed the requirements for passing self-proficiency test in respect of certain individuals/ professionals to become Independent Directors.

Now, the Institute of Chartered Accountants of India (ICAI) has reiterated that the Chartered Accountants who are or have been, in practice for at least 10 years are not required to pass the online proficiency self-assessment test to become an Independent Director.

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Master Direction on Financial Statements - Presentation and Disclosures ‒ 30 August 2021

The Reserve Bank of India (RBI) has issued the ‘Master Direction on Financial Statements - Presentation and Disclosures’ thereby incorporating, updating and harmonizing wherever required all current instructions i.e. guidelines/instructions/directives on presentation and disclosure in financial statements at one place for reference.

It may be noted that in addition to these disclosures, Commercial Banks shall comply with the disclosures specified under the applicable regulatory capital framework.

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Guidelines on Compensation of Whole Time Directors/ Chief Executive Officers/ Material Risk Takers and Control Function staff – Clarification ‒ 30 August 2021

The RBI has said that the fair value of the share-linked incentives paid to chief executive officers (CEOs), whole-time directors and other key functionaries by the private banks should be recognised as an expense during the relevant accounting period.

In terms of the extant guidelines, share-linked instruments are required to be fair valued on the date of grant using Black-Scholes model.

The banks are required to comply with these directions for all share-linked instruments granted after the accounting period ending 31 March 2021.

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General Insurance Business (Nationalisation) Amendment Act, 2021 ‒ 27 August 2021

The provisions of the General Insurance Business (Nationalisation) Amendment Act, 2021 (37 of 2021) shall come into force w.e.f 27 August 2021.

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